Congress extended and expanded the first-time homebuyer tax credit to homes under contract before May 1. The credit, equal to 10 percent of a home’s purchase price, is capped at $8,000 for first-time homebuyers, but income limits are almost doubled.

Congress also approved an expansion of the credit to allow homeowners who have been in a principal residence for at least five of the last eight years to claim a tax credit of up to $6,500 if they sell that home and buy another. That will provide an incentive not only for entry level, but move-up buyers — a goal supported by real estate industry groups.

Although income limits for claiming the credit will be raised from $75,000 to $125,000 for individuals and from $125,000 to $225,000 for couples, homes purchases exceeding $800,000 will not be eligible.

The bill was approved by the Senate in a unanimous 98-0 vote. House lawmakers passed the bill today in a 403-12 vote, with all 12 no votes cast by Republicans.

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